automobile evolution

8/8/2019 Automobile Evolution

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Presentation on Landscape of

Automobile Industry in India

Consulting Club



Evolution of Automobile Industry

Initial YearsManufacturing was licensed

High Customs duty on import

Steep excise duties &

sales tax

2 Major players:

Premier Automobiles Ltd

& Hindustan Motors

1980s

Entry of MUL, better product,

with government support

Seller¶s Market

Long Waiting Periods

Early to mid 90s

Seller¶s market and long

waiting periods

Delicensing in 1993

Removal of capacity

restrictions

Decrease in customs &

excise

Auto finance boom- more

players (foreign banks &

non banking companies,

better schemes.

Mid 90s ± Early 2000s

Buyers market

Increase in Indigenization

Easy Auto finance

Manufactures diversifying

into related activities:finance lease, fleet

management, insurance

and used car market



AUTOMOBILE

2 WHEELER 3 WHEELERPASSENGER

VEHICLE

COMMERCIAL

VEHICLE

MOTORCYCLE SCOOTERS SCOOTERETTES MOPEDS

I.C.V. M.C.V. H.C.V.



Trends in the automobile sector«

Product on of automobiles

4.85.3

6.3

7.2

8.5

0

2

4

6

8

10

2000-01 2001-02 2002-03 2003-04 2004-05

m i l l i o n n u m b e r s

Domestic Sales of automobiles

4.65.2

5.96.8

7.9

0

2

4

6

8

10

2000-01 2001-02 2002-03 2003-04 2004-05


Expor ts of automobiles

0.17 0.18

0.31

0.48

0.63

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

2000-01 2001-02 2002-03 2003-04 2004-05


CAGR 15.4%CAGR 14.2%

CAGR 39%Domestic Sales have been growing strongly

Exports have nearly tripled in the last 5 yearsLargest three wheeler market in the world

4th largest passenger vehicle in Asia

4th largest tractor in the market

5th largest commercial vehicle market in the world



Segment wise market share«

Growth Rates of different segments

23.5

11.3

14.3 14 14.2

0

5

10

15

20

25

Commercial

Vehicles

Passenger

Vehicles

Two

wheelers

Three

wheelers

total

Automobiles

Segments

4 y e a r C A G R

Two Wheeler

ThreeWheeler

Passenger vehicles

CVs

The industry has not experienced much change in its structure over the last 6 years

Two- wheelers form the major share of domestic sales

Passenger vehicles lead the exports market(57.4%)

2 wheelers form the bulk of exports as well, but are losing share to Passenger vehicles

The growth in the two wheeler market is driven by the motorcycle market and is

expected to grow at 14-15 % YOY

78.63%

13.44%

4.03%3.9%



The Key Players«

Commercial

vehicles

TATA Motors, Ashok Leyland, Swaraj Mazda,Mahindra & Mahindra ,Force

motors, Eicher Motors

Passenger

vehicle

TATA Motors, Maruti Udyog, Honda Motors, Toyata, Skoda, Mahindra &

Mahindra, Daimler Chrysler, Hindustan Motors

Two Wheeler Hero Honda, Bajaj Auto, Honda Motors, TVS Motors, Yamaha , Kinetic Motors

Three Wheeler Bajaj Auto, Piaggio India

Bajaj Auto,

24.4%

TVS Motors,

17.7%

Yamaha,

3.8%

Others, 5.8%

Honda

Motors, 8.5%

Hero Honda,

39.8%

Maruti,

Hyundai,

Tata Motors,

Honda,

thers,

Two wheeler Passenger vehicle



Favorable Demographics

Improving income cur ve

Reducing interest rates

Cost Pressure

High Expectations

Inadequate Infrastructure Development

KEY CHALLENGESKEY ENABLERS

Key Focus Areas

Product development( includes collaboration, new products developed)

Vendor base (quality of vendors, skill levels , size etc.) Manufacturing capability( quality levels, productivity & skill levels, technology )

Ser vice levels

Supply chain

Labor law

Leverage IT

Key Features of Future Auto Policy

Foreign Direct Investment

Import tariff

Incentives for Research and Development (R&D)

Environmental Aspects

Other measures



THANK YOU

automobile evolution

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